The sales for October, November and December are $10,000, $12,000 and

The sales for October, November and December are $10,000, $12,000 and $18,000, respectively.

For any particular month of sales, the following percentages are received over time in cash: 20% in cash from that same month of sales; 50% in cash from the previous month’s sales; and, 30% in cash from the sales from two months ago. What amount of cash will be received during December?
A) $12,600
B) $12,000
C) $9,600
D) $9,000

ANSWER

Answer: A
Explanation: A) Cash received during or by the end of December is: 0.2 × December Sales + 0.5 × November Sales + 0.3 × October Sales = 0.2 × $18,000 + 0.5 × $12,000 + 0.3 × $10,000 = $3,600 + $6,000 + $3,000 = $12,600.